Tollway's Land Buys Are Probed

May 31, 1995|By Robert Becker and Bob Merrifield, Tribune Staff Writers. Tribune staff writers Ray Gibson and William Presecky contributed to this report.

At least five land transactions completed during the administration of ousted Illinois State Toll Highway Authority Executive Director Robert Hickman are now under investigation by state police, it was learned Tuesday.

The deals include a parcel on the south extension of Interstate Highway 355 in Will County, another in DuPage County along the East-West Tollway and Cook County acquisitions for the Tri-State Tollway widening project, according to authority records released in response to Freedom of Information media requests.

While attorneys representing some of those who sold land to the authority said the purchase prices were not out of line, the FOI response signals an expansion of a probe into possible wrongdoing in tollway authority land purchases and sales during Hickman's administration.

An investigation of the DuPage property involving the sale of 12 acres of property to WMX Technologies in 1992 for $3.8 million, resulted in criminal indictments earlier this year of Hickman and state Rep. Joseph Kotlarz (D-Chicago), who allegedly received a $190,000 real estate fee from the transaction.

Illinois State Police spokesman Mark McDonald declined to comment about an expanded probe, but records and interviews with others indicate investigators are now looking at why some purchase prices paid by the tollway authority exceeded the appraised prices of the properties.

Among the properties under scrutiny, according to sources close to the investigation, is a half-acre parcel in unincorporated Lyons Township purchased by the Tollway for $58,100 in December 1993. The purchase price reportedly exceeded an appraisal by thousands of dollars.

Another property under investigation is the site of a former S&H Green Stamp warehouse in west suburban Hillside purchased by the tollway in 1992. Records at the Cook County Recorder of Deeds office show that the agency spent about $650,000 for 27,000 square feet of property-more than $27 a square foot-and obtained an easement for another 51,000 square feet.

Gerald Fogelson, general partner of Wareco Inc., the seller, said the authority wanted the property for an embankment and wall as part of the Tri-State widening project.

In another transaction under investigation, both the owners and their attorney say the appraisal was consistent with the price.

The home and property of Kenneth and Linda Schultz in unincorporated La Grange was appraised at approximately $230,000, which was close to the final price paid by the tollway of $246,000, according to their attorney.

In April, state police said they were investigating the $1.25 million purchase of land in Will County that state appraisers had valued at $662,000, records show.

The property, owned by Continental Offices Ltd. and developer Donald Hedg, had been annexed and subdivided by the Lemont Village Board, actions the former owners said increased the property's value.

Despite notice to Lemont officials by the Illinois Department of Transportation that a well-publicized, 350-foot westerly shift in the proposed alignment of I-355 at Bluff Road would take in the entire Hedg parcel, records show the village incorporated the property anyway.

Less than two weeks after the Lemont Village Board took final action on Hedg's request for subdivision approval, IDOT filed a lawsuit in Will County Circuit Court seeking to condemn the land as a future right of way for I-355.

The state's highest appraisal on the property was $662,600, court records show. But the record also shows that appraisals commissioned by Hedg and by Continental Offices came in with an appraisal of about $1.5 million.

In January 1994, a Will County judge recommended that $800,000 be paid to Hedg to settle the case.

The tollway authority took over the condemnation case from IDOT on March 3, 1994. Two weeks later, Hickman announced his intention to resign.

Within a month, the $1.25 million deal for the land was made and the settlement of the condemnation suit was approved.

Hedg could not be reached for comment, but J. Steve Santacruz, lawyer for Continental Offices, said the final price was lower than the sellers had hoped for.

In the case of the WMX property, located north of the East-West Tollway at Meyers Road in Oak Brook, the company paid an Arlington Heights real estate firm a $240,000 commission.

That fee led to the DuPage County grand jury indictments of Hickman and Kotlarz last February on charges of theft and conspiracy.